The Changing Asian Insurance Landscape

13 June 2018

Change first or be changed — this is especially so with the Fourth Industrial Revolution shaking the foundations of industries around the globe. With the Internet of Things shifting businesses towards higher interconnectivity and artificial intelligence automating work processes, the insurance industry can either harness the transformative powers of these developments or lag behind clients’ rising expectations and evolving needs.

JLT Asia has reached out to our strategic partners to discuss the results of the four broad changes driving the transformation of the insurance industry in Asia.

The following key changes will be discussed in this 4 part series. 

  1. Increasing quality of client servicing with InsureTech
  2. Opening of Asian regulatory environment
  3. Flattening of rates and increasing frequency of Natural Catastrophes 4.
  4.  Fast growth of cyber insurance

INCREASING QUALITY OF CLIENT SERVICING WITH INSURETECH

InsureTech enables new ways for the insurance industry to value-add. Blockchain technology, for example, allows for Smart Contracts that speed up the process time for insurance placements and claims payments. According to McKinsey, digitization has reduced the time taken for an auto insurance claims settlement to reduce from about 20 days to just 2 hours.

“We should embrace technology as it makes us better able to listen to what clients want,” said Angela Kelly, CEO of Lloyd’s Asia, “With machines dealing with the mundane tasks, this leaves us better able to service our clients. We are in a relationship business and technology should be a tool to help with that.”

Client expectation grows as a result, adding more pressure for InsureTech to be used by the insurance industry. It is no surprise that clients’ have come to expect more given the industry’s increased ability to improve their experience. In the recent times, the demand for customized solutions (especially from SMEs or micro-enterprises or individuals) has led to the creation of opportunities for new entrants focussing on digital distribution and aggregator technology segments.

The result of this pressure has driven the funding of InsureTech start-ups or ventures in Asia. Total transaction values of InsureTech M&As in Asia has tripled from an estimated USD 153 Mn in 2016 to USD 460 Mn in 2017. Evidently, Asia is a fertile field for innovation and development in InsureTech. The region is home to over 100 recognized InsureTech start-ups (7% of the global total, 2016) and accounts for close to 16% of the global InsureTech funding (as of Q2 2017).

Evidently, Asia is a fertile field for innovation and development in InsureTech. The region is home to over 100 recognized InsureTech start-ups (7% of the global total, 2016) and accounts for close to 16% of the global InsureTech funding (as of Q2 2017).

Look out for part 2 of this series where we discuss how opening of the Asian regulatory environment impacts the insurance landspace. 

For further information, please contact Graham Edwards, Regional Director of Sales and Marketing at Graham_Edwards@jltasia.com